Kazakhstan’s embattled currency, the tenge, breached the psychological mark of 350 against the dollar in morning trade on January 8 on the back of the falling oil price, touching a new historical low of KZT351.85. The previous low was KZT349.12 was established in morning trade on December 21.
Under pressure from low oil prices, the National Bank of Kazakhstan, the central bank, was forced to allow the tenge to float freely on August 20 but continued propping up it as the Kazakh currency depreciated. As a result, the central bank under the previous governor, Kairat Kelimbetov, abandoned a free-floating exchange regime in September and continued interventions until November. In total, the bank spent over $5bn on supporting tenge’s exchange rate.
On November 2, Daniyar Akishev replaced Kelimbetov at the helm of the central bank and readopted a free-floating exchange regime, allowing the tenge to gradually slide from KZT280 to the dollar to the current level.
The price of Brent oil fell to about $32 per barrel on January 7 on the news that US oil production increased by 17,000 barrels a day in the previous seven days despite the supply glut.